Banks aim to repeal credit unions' federal tax exemption

[jeffrey]

Credit unions have been snatching customers from banks amid consumer frustration over rising fees and outrage over Wall Street's role in the financial crisis.

Now banks are fighting back by trying to take away something vital to credit unions — their federal tax exemption.

With fast-growing credit unions posing more formidable competition to banks, industry trade groups are pressing the White House and Congress to end a tax break that dates to the Great Depression...

http://www.latimes.com/business/la-fi-credit-union-taxes-20130706,0,4104761,full.story

[Joan.of.the.Arch]

In Iowa last week we saw a highway billboard saying, "Families pay taxes. Ask your legislator why credit unions don't."

Clearly banks had sponsored the sign. My thought was, "Hey, I am the credit union. When I get share deposit dividends/interest I do pay taxes on that.

[MonkeyMama]

I wouldn't even know where to begin...

[bUU]

I have to admit I don't know much about the governance structure and parameters of certification for credit unions. How is a credit union's money (outside of depositor accounts and money invested in the granting of loans) regulated? How is that regulation different from that of other tax-exempt not-for-profits?

[bjl584]

It sounds like the banks are getting desperate.

[bUU]

Don't mistake simple avarice for desperation. There is so little cost to banks to take this action, and so much possible gain, that it is almost surely nothing other than a "good investment".